Human Resources policies for your small business

In this fifth article of our series of employment law articles we discuss some of the legal and practical matters small businesses ought to consider in relation to the employment life cycle of an employee, that is, from the recruitment stage to the employee ceasing to be employed. Part four of the series published on 6 July 2017 dealt with the importance of a properly drafted contract of employment. This piece looks at the importance of, and risks relating to, human resources policies.

Human Resources (HR) policies typically relate to matters such as:

  • Absenteeism and leave including annual leave, sick leave etc. – and the procedures required to be followed.
  • Bullying
  • Code of conduct.
  • Discrimination.
  • Dress code (although this has become a contentious issue and some dress codes are discriminatory).
  • Drug and alcohol – including testing.
  • Fitness for work.
  • Grievance dispute procedure.
  • Information technology.
  • Parental leave.
  • Performance management.
  • Protection of confidential information and intellectual property (although it is usually important that these obligations are expressly referred to in an employee’s contract of employment).
  • Redundancy.
  • Sexual harassment.
  • Social media.
  • Termination of employment.
  • Vehicles
  • Work health and safety (OHS).

This is by no means an exhaustive list and depending on the nature of your business, some policies may be relevant whilst others are not.

There are often many important benefits arising from a well-drafted policy. Good HR policies can help employers more efficiently manage their business and help streamline the management of people issues. However, whilst there has been a dramatic proliferation of HR policies in recent years, there are potential risks associated with these documents. It is vital that the interaction between the HR policy and the employees’ contracts of employment has been understood and is properly expressed in the documents and where the HR policy is binding on the employer, the policy itself provides for sufficient flexibility.

Some HR policies are mistakenly incorporated into an employee’s contract of employment meaning that the employer can be legally bound to comply with the terms of the HR policy. Sometimes, with the best of intentions at the time of implementing the policies, employers adopt unnecessarily elaborate and rigid processes and procedures. Whilst these documents can appear impressive at the time they are put in place, they can come back to haunt an employer if they provide contractual rights to employees and do not provide sufficient flexibility. “Off-the-shelf” policies can also be inappropriate and potentially harmful if they are not specifically tailored to your specific business.

The importance of appropriate policy documentation for small business, particularly as the business grows should not be underestimated.

Jeremy Cousins, Principal, Whitehall Workplace Law

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